What Is a Real Estate Variance?

A variance grants an exception to local zoning rules when a property’s unique characteristics or intended use cannot comply with standard regulations. Municipalities grant variances so that projects with legitimate constraints, like an irregular lot shape or a specialized facility need, can move forward without harming neighborhood character. Rather than forcing a rigid fit, a variance lets developers, brokers and investors adapt standards for practical feasibility.

Types of Variances in Real Estate

1). Use Variance

A use variance allows a land use that zoning laws normally prohibit. For example, converting a residential-zoned parcel into a boutique gallery or light-manufacturing studio. Recipients must show a hardship rooted in zoning constraints, not personal preference, and prove the new use won’t undercut public safety or neighborhood value.

2). Area (Dimensional) Variance

An area variance covers deviations in setback, lot coverage, height or parking requirements. Imagine a corner lot with an odd angle that can’t fit a standard parking layout. An area variance adjusts setback rules so the developer can provide adequate spaces without trimming the building footprint.

Purpose

1). A use variance in real estate grants property owners an exception to local zoning laws and existing zoning regulations when strict city council–approved zoning ordinances would otherwise prohibit their intended use. This variance request lets applicants secure approval from the local governing body or zoning authority to pursue a commercial property conversion, residential redevelopment or unique circumstances on land that current zoning requirements would block.

2). An area variance, by contrast, adjusts dimensional standards such as property line setbacks, height limits or lot coverage when physical changes to the building or site create unnecessary hardship under the existing zoning laws.

Typical Hardship

1). When a use variance is requested, the applicant must prove that the zoning board or local zoning board meetings have shown the prohibition on the intended use causes hardship beyond personal preference. This hardship is evaluated case by case basis with detailed information, including architectural drawings and a variance letter outlining why strict zoning regulations conflict with the parcel’s essential character.

2). An area variance hardship usually arises when the size, shape or topography of a single family home lot or commercial property makes compliance with current zoning requirements virtually impossible without redesign or expensive structural modifications.

Common Example

1). A classic use variance example is converting a single family home into a boutique office or retail space in a zoning district that permits only residential uses. In this scenario, the applicant submits a variance application to the local zoning authority and attends a public hearing alongside community members at city council or zoning board meetings.

2). An area variance example might involve adding a two-car garage to a lot where the strict setback standards would block any new construction; the applicant shows the board that adhering to the existing zoning laws would force the garage footprint off the property or violate the property line buffer.

Key Approval Focus

For a use variance, the zoning board evaluates whether the requested variance will impact public health, safety or the essential character of the neighborhood and whether similar approved variances set a precedent under local rules. The appeal process may follow if community members or the zoning authority challenge the decision.

For an area variance, the focus is on light, air and access for adjacent properties and whether the hardship stems from land or structural constraints rather than self-inflicted design choices. Both types of variances require the applicant to demonstrate compliance with variance application guidelines, pay the requisite fees and often secure approval before the expiration date set by local governments.

Why Variances Matter for Investors & Developers

Variances unlock value trapped by rigid zoning boundaries. A well-secured variance can add 10–15% to project returns by enabling higher-density builds or more profitable land uses. For a mid-sized developer in Denver, obtaining an area variance for reduced parking added 8 additional townhomes, lifting projected IRR from 12% to 16%.

Brokers use variance potential as a negotiating tool. Listing a parcel with a “pre-approved zoning variance opportunity” often commands a premium over strictly by-right sites. Consultants leverage variance feasibility studies to guide capital allocation, steering clients toward parcels where zoning flexibility dovetails with market demand.

The Step-by-Step Variance Application Process

Pre-application Due Diligence

• Engage a zoning attorney or planner for a feasibility memo.
• Collect surveys, architectural sketches and site photos.
• Run a title search for easements or deed restrictions.
• Reach out to immediate neighbors for early feedback.

Submitting Your Variance Request

• Complete the municipal variance application form.
• Attach required exhibits: site plan, hardship statement, impact analysis.
• Pay application fees (often $500–$1,500).

Zoning Board Hearing & Decision

• Present hardship evidence and community benefits at the hearing.
• Address board member questions with concise, data-driven responses.
• Expect a decision in 4–8 weeks; prepare for potential continuance requests.

Common Challenges & Risk Mitigation

• Neighbor Opposition, Host a small meeting or mail an informational flyer to reduce pushback.
• Incomplete Hardship Documentation, Build a robust case with market comparables and engineering reports.
• Extended Timelines. Factor a buffer of 30–60 days in your project schedule for potential rescheduling.

Best Practices for Brokers & Consultants

• Commission a variance feasibility addendum alongside the Phase I environmental report.
• Bundle variance requests when possible (e.g., combine an area and special-use variance) to save on hearing fees and consolidate testimony.
• Track local zoning code updates monthly using a dedicated ordinance-tracking tool.

Decision Checklist of Should You Pursue a Variance?

• ☐ Does the parcel’s configuration or intended use conflict with existing zoning?
• ☐ Are estimated additional returns greater than application costs and delay risks?
• ☐ Can hardship be clearly documented with site-specific constraints?
• ☐ Will community engagement reduce opposition?
• ☐ Do local board precedents favor similar variance requests?

Frequently Asked Questions

What’s the difference between a variance and a zoning amendment?

A variance adjusts requirements for a single parcel. A zoning amendment rewrites the code for an entire zone. Variances move faster and target specific needs.

How long does a variance stay valid?

Most municipalities require work to start within six months of approval. Check local ordinances, extensions may be possible.

Can I lease out a property granted a use variance?

Yes. Landlords often secure use variances to attract higher-rent tenants, then assign lease rights under the new approved use.

Check Back for Updates and Advice on Variance, Real Estate, and More

A well-managed variance strategy transforms obstacles into opportunities, boosting project viability and competitive edge. As the current state of zoning ordinances continues to evolve, our resources do as well. We like to address this with the tools and templates typically requested by brokers, investors, and consultants.

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